Some trial judges have debated whether, when one or more attorneys for a proposed class are accused of ethical misconduct in a case, that is a matter only for the bar authorities or is an appropriate issue for class certification.  The Seventh Circuit recently held, quite forcefully, that misconduct by plaintiffs’ counsel is an appropriate ground for denying certification.  In my mind, this highlights how important it can be for defense counsel to inquire into how the named plaintiffs found their lawyers and the relationship between them.  That is normally part of the defense playbook, but is an issue on which plaintiffs’ counsel often try to hide behind the attorney-client privilege more than the law may permit.  It’s not unusual to find plaintiffs’ counsel skirting ethical boundaries in finding their clients and entering into an attorney-client relationship with them. 

Creative Montessori Learning Centers v. Ashford Gear LLC, No. 01-8020, 2011 U.S. App. LEXIS 23324 (7th Cir. Nov. 22, 2011) is one of numerous class actions brought under the federal Telephone Consumer Protection Act, also known as the “junk fax” statute.  This statute, designed to save fax machine owners from the annoyance and cost of unsolicited faxes, imposes draconian penalties on senders of such “junk faxes.”  When this was enacted, members of Congress probably thought they were saving some ink and paper and discouraging an annoying practice.  Few of them likely realized that they were creating a massive new target for the plaintiffs’ class action bar.  As Judge Posner’s opinion notes, making this case a class action turns a $3,000 dispute over the penalty for sending two unsolicited faxes allegedly sent to the named plaintiff into a potential $11 million case against a tiny company with three employees which may have been unaware of the statute.  This seems to be the kind of statute that really should have a prohibition on class actions – the individual penalty should be large enough to deter violators (and one could even implement enhanced penalties for repeat violators without resulting in massive potential class action liability). 

The district judge found that there was misconduct by plaintiff’s counsel in two respects: (1) promising confidentiality to a third-party “fax broadcaster” who provided information to plaintiffs’ counsel regarding faxes that she sent out for her clients; she was not told that the plaintiff’s attorneys intended to use the information to bring a lawsuit and breach the confidentiality assurance; and (2) sending a letter to the named plaintiff offering to represent it, in which plaintiff’s counsel suggested that there was already a certified class (when there was not).  The trial judge concluded that this misconduct was a matter for the bar authorities, not relevant to adequacy of representation. 

The Seventh Circuit granted permission to appeal under Rule 23(f) and vacated and remanded the class certification order.  It explained that: 

class counsel have demonstrated a lack of integrity that casts serious doubt on their trustworthiness as representatives of the class. Fed. R. Civ. P. 23(a)(4), (g). There is no basis for confidence that they would prosecute the case in the interest of the class, of which they are the fiduciaries, rather than just in their interest as lawyers who if successful will obtain a share of any judgment or settlement as compensation for their efforts.

 Class counsel owe a fiduciary obligation of particular significance to their clients when the class members are consumers, who ordinarily lack both the monetary stake and the sophistication in legal and commercial matters that would motivate and enable them to monitor the efforts of class counsel on their behalf.

. . .

Misconduct by class counsel that creates a serious doubt that counsel will represent the class loyally requires denial of class certification

Id. at *8-9, 13 (emphasis added; citations omitted). 

Some judges may be reluctant to engage in this kind of ethical inquiry as part of a class certification decision because it creates a sideshow, a type of “case within a case,” and puts counsel appearing before the court in a particularly uncomfortable position (and potential conflict with their client).  But the Seventh Circuit says pretty strongly here that this is an appropriate area of inquiry, and for good reason.  Judge Posner points out how, in a class action, the named plaintiffs rarely exercise any real control over their lawyers, and thus the court has to play that role in endeavoring to protect the absent class members.  Judge Posner also discusses the problems that can arise when courts are dealing with non-adversarial proposed settlements supported by both sides, although that does not seem particularly pertinent here.  In this instance, the defendant had every incentive to raise the ethical issues in defending against class certification, and thus the judge did not have to reach out into an area in which there was a lack of adversarial process.  What I see this case as demonstrating is that an important role a defendant can play in defending against class certification is to help the judge take steps to protect absent class members.  Plaintiffs’ counsel sometimes try to suggest that it is not appropriate for the defendant to assert the rights of putative class members, but defendants must do that where appropriate to aid the judge in performing his or her function. 

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Photo of Wystan Ackerman Wystan Ackerman

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you…

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you have something to say.  For those looking for my detailed law firm bio, click here.  If you want a more light-hearted and hopefully more interesting summary, read on:

People often ask about my unusual first name, Wystan.  It’s pronounced WISS-ten.  It’s not Winston.  There is no “n” in the middle.  It comes from my father’s favorite poet, W.H. (Wystan Hugh) Auden.  I’ve grown to like the fact that because my name is unusual people tend to remember it better, even if they don’t pronounce it right (and there is no need for anyone to use my last name because I’m always the only Wystan).

I grew up in Deep River, Connecticut, a small town on the west side of the Connecticut River in the south central part of the state.  I’ve always had strong interests in history, politics and baseball.  My heroes growing up were Abraham Lincoln and Wade Boggs (at that time the third baseman for the Boston Red Sox).  I think it was my early fascination with Lincoln that drove me to practice law.  I went to high school at The Williams School in New London, Connecticut, where I edited the school newspaper, played baseball, and was primarily responsible for the installation of a flag pole near the school entrance (it seemed like every other school had one but until my class raised the money and bought one at my urging, Williams had no flag pole).  As a high school senior, my interest in history and politics led me to score high enough on a test of those subjects to be chosen as one of Connecticut’s two delegates to the U.S. Senate Youth Program, which further solidified my interest in law and government.  One of my mentors at Williams was of the view that there were far too many lawyers and I should find something more useful to do, but if I really had to be a lawyer there was always room for one more.  I eventually decided to be that “one more.”  I went on to Bowdoin College, where I wrote for the Bowdoin Orient and majored in government, but took a lot of math classes because I found college math interesting and challenging.  I then went to Columbia Law School, where I was lucky enough to be selected as one of the minions who spent their time fastidiously cite-checking and Blue booking hundred-plus-page articles in the Columbia Law Review.  I also interned in the chambers of then-Judge Sonia Sotomayor when she was a relatively new judge on the Second Circuit, my only connection to someone who now has one-ninth of the last word on what constitutes the law of our land.  I graduated from Columbia in 2001, then worked at Skadden Arps in Boston before returning to Connecticut and joining Robinson+Cole, one of the largest Connecticut-based law firms.  At the end of 2008, I was elected a partner at Robinson+Cole.

I’ve worked on class actions since the start of my career at Skadden.  Being in the insurance capital of Hartford, we have a national insurance litigation practice and I was fortunate to have the opportunity to work on some prominent class actions arising from the 2004 hurricanes in Florida and later Hurricane Katrina, including cases involving the applicability of the flood exclusion, statutes known as valued policy laws, and various other issues.  My interest and experience in class actions gradually led me to focus on that area.

In Connecticut courts I’ve defended various kinds of class actions that go beyond insurance, including cases involving products liability, securities, financial services and consumer contracts.

My insurance class action practice usually takes me outside of Connecticut.  I’ve had the pleasure of working on cases in various federal and state courts and collaborating with great lawyers across the country.  While class actions are an increasingly large part of my practice, I don’t do exclusively class action work.  The rest of my practice involves litigating insurance coverage cases, often at the appellate level.  That also frequently takes me outside of Connecticut.  A highlight of my career thus far was working on Standard Fire Ins. Co. v. Knowles, the U.S. Supreme Court’s first Class Action Fairness Act case.  I was Counsel of Record for Standard Fire on the cert petition, and had the pleasure of working with Ted Boutrous on the merits briefing and oral argument.

I started this blog because writing is one of my favorite things to do and I enjoy following developments in class action law, writing about them and engaging in discussion with others who have an in interest in this area.  It’s a welcome break from day-to-day practice, keeps me current, broadens my network and results in some new business.

When I’m not at my desk or flying around the country trying to save insurance companies from the plaintiffs’ bar, or attending a conference on class actions or insurance litigation (for more on those, see the Seminars/Programs page of this blog), I often can be found playing or reading with my young daughter, helping my wife with her real estate and mortgage businesses, reading a book about history or politics, or watching the Boston Red Sox (I managed to find bleacher seats for Game 2 of the 2004 World Series when Curt Schilling pitched with the bloody sock).  When the weather is good I also love to take the ferry to Block Island, Rhode Island and ride a bike or walk the trails there. If you go, I highly recommend the Clay Head Trail.